Good morning and welcome to the Gladstone Commercial Corp's First Quarter Conference Call. All participants will be in a listen-only mode. (Operator Instructions). After today’s presentation, there will be an opportunity to ask questions. (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Mr. Gladstone. Please go ahead, sir.

Thank you, Denise, and thanks to all of you for calling in. We always enjoy these times that we have with you on the phone and wish we had a lot more of them but here we go. By the way, if you're ever visiting the Washington D.C. area we are located in a suburb called McLean, Virginia, and if you have an open – I want you to know that you have an open invitation to stop by and see us if you’re ever in this area. You'll see a great team at work here. We are now almost 60 members of the team and no longer a small business and by the way we have a few puppy dogs that come in every day to the office. Now, let me read these forward-looking statements that's the report that I’m about to give that we are about to give include statements that may constitute forward-looking statements within the meaning of Securities Act of 1933 and Securities Exchange Act of 1934, including statements with regard to the future performance of our company. These forward-looking statements involve certain risks and uncertainties that are based on our current plans and we believe those plans to be reasonable. There are many factors that may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements including those risk factors listed under the caption Risk Factors in our company’s 10-K and 10-Q filings that we filed with the Securities and Exchange Commission and those in the 10-Ks can be found in our website at www.gladstonecommercial.com and also on the SEC website. The company undertakes no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events, or otherwise. In the talk today, we plan to talk about funds from operation or as we refer to it, FFO. And since FFO is a non-GAAP accounting term, I need to define FFO and that is its net income excluding gains and losses from the sale of real estate plus depreciation and amortization of real estate assets. The National Association of Real Estate Investment Trust has endorsed FFO as one of those non-accounting standards that we can use in discussing our REIT as well as others use it for their REITs. And please see our 10-Q filed yesterday with the SEC and our financial statements for a detailed description of FFO. Now, let’s get started with the call today by hearing from our President, Bob Cutlip. Bob, go ahead

Thanks David. Good morning everyone. During the quarter we acquired one additional property and simultaneously placed long-term debt on this property, issued common equity under our ATM program, and extended the term on one of our upcoming expiring leases. After the end of the quarter we extended another of our upcoming expiring leases, funded an expansion at one of our properties and also extended that lease and signed a lease on one of our previously vacant property. Our pipeline is robust and we hope to announce additional acquisitions in the very near future. Now, for some details. As I mentioned earlier we acquired one additional property this quarter. The property acquired is an office building with approximately 29,000 square feet which was purchased for $5.7 million and is located in Egg Harbor Township, New Jersey. We funded this acquisition through a combination of borrowings from our line of credit and the issuance of $3.7 million of mortgage debt on the property. This property includes both administrative and operational office space leased to AtlantiCare Health System, Inc., a not for profit health system consisting of 100 operating locations in Southern New Jersey. AtlantiCare has leased the property for 10 years. At March 31, 2013 all the three of our buildings continue to be fully occupied and all of the occupied building tenants continue to pay as agreed. Two of these buildings are 100% vacant and one is partially vacant. One of the fully vacant buildings is located in Hazelwood, Missouri, a suburb of St. Louis. And the other building is located in Richmond, Virginia. The leases on these two vacant buildings comprised 1% of our annualized rental income as of March 31, 2013. We are actively seeking new tenants for our Richmond, Virginia building and are happy to announce that we…

Alright, Bob, thank you, that was a good presentation. And now let’s turn it over to Chief Financial Officer and Treasurer, Danielle Jones, for a report on the financial results. Danielle?

Thanks David. Good morning everybody. Our quarterly results were strong and reflect our continued growth from our acquisitions, which is evidenced by our total assets increasing to $569 million from our acquisition during the quarter. Amounts outstanding under our long-term mortgages and our line of credit also increased to $387.4 million, a slight increase from the end of the year. In addition, our stockholders equity including our Term Preferred Stock increased slightly from the end of the year to $162.1 million from the issuance of common stock under our ATM program during the quarter. Reviewing our upcoming long-term debt maturities, we have mortgage debt in the aggregate principal amount of $13.9 million payable during the remainder of 2013 and $24.5 million payable during 2014. The 2013 and 2014 principal amounts payable include the loan principal payments due in December of 2013 and June of 2014. However, we are initiating conversations with these lenders in advance of these maturities and anticipate being able to extend the maturity date or refinance with new lenders. The tenant of the property where our debt matures in December of this year recently extended their lease for an additional 10 years, thus we believe we will be able to refinance this mortgage relatively easily. We intend to pay the additional debt amortization payments from operating cash flow and borrowings under our line of credit. The weighted average interest rate on our existing mortgage remains at 5.6%. Turning to our line of credit we had $26.4 million outstanding under the line at the end of the quarter at a weighted average interest rate of approximately 3%. We will use the proceeds from our overnight rate that closed yesterday to repay a portion of this balance. As Bob discussed, our line of credit matures at the end of…

Alright, that was a good report from Danielle. We encourage all of the listeners to read our press releases and our annual report -- quarterly report that was filed yesterday with the SEC on Form 10-Q. There is a lot of good material that goes into these documents and you can find them on our website www.gladstonecommercial.com and also on the SEC website. To stay up to-date on the latest news involving Gladstone Commercial and our other public companies please follow us on Twitter using the name GladstoneComps and also on Facebook under The Gladstone Companies, and you can go to our general website and see more information about us at www.gladstone.com. The main news to report for this quarter is that we are able to acquire additional property, issue some long-term debt, issue some common stock under the ATM program and extend our leases that were scheduled to mature this year, all of this is very positive news for our shareholders. We built up a nice list of potential acquisitions and because of that list we hope to be able to grow the asset portfolio even more during 2013. With the increase in the portfolio of properties commence greater diversification and we believe that’s better earnings for our shareholders. On another note we’ve been able to find some attractive long-term mortgages to finance our unencumbered properties. The mortgage market from banks and insurance companies and others is getting much better, and we have a long-term mortgage on 65 of our 81 properties that we own. Most of the remaining properties are pledged as collateral to our line of credit and provide us with additional liquidity. We also continue to look at properties with mortgages on them so we can assume the mortgages and not have to secure financing and…

We will now begin the question-and answer-session. (Operator Instructions). We have a question from Dan Donlan from Ladenburg Thalmann. Please go ahead.

So, just can we talk a little bit about the lease roll in 2014; it’s all the way down to I think 5.5% of your rents. Any indications on what may happen at some of those properties and I think its either four or five properties that are coming up for renewal?

Bob, do you want to speak to that please.

Sure. Dan, we in fact had six leases that are scheduled to expire in 2014. We have already renewed two of those. We’re in negotiations with three others, and then the final one is a December expiration and we haven’t picked on that.

Okay.

I think we’re pretty confident. We did as you can tell, we did fairly -- I think, we did very well in 2013. In 2012, we had renewed all of our leases that came due. Of course, one of them reduced in space but the track record is good and we just try to stay out in front of it and stay close to the tenant during the term, and then of course initiate our conversions at least 18 months in advance because we’re seeing them at least quarterly anyhow.

Okay. And from a rent standpoint, are you expecting to see rollups on these tenants, on these leases and then what type of tenant improvements or any CapEx stars that you are looking at?

I think it depends on the specific. I think to be clearly honest with -- when some of these leases were completed coming forward over let’s say the next two to three years, there maybe some - some minor cash roll downs. But I think when we look at our average straight line rent, I think we’re still going to have plus up. Most of the -- I do expect that we’ll have tenant improvements on the – on both the industrial and the office but there is going to be more cosmetic. At this point even this year, we only have -- we have two routes that we are replacing and some concrete porches at one location that have to be repaired but pretty much the responsibility for the maintenance and repair of the buildings belong to the tenants, and the tenant roster has done a very good job at maintaining the properties.

Okay. And then as far as your acquisition pipeline looks, could you maybe talk about how robust that is and maybe kind of give us some flavor what type of properties are you guys are looking at, is it office, is it some warehouse, what the type of properties you are looking at?

Sure. We try to maintain the – we try to maintain I think somewhere from minimum of $250 million in the pipeline and that covers some an initial review, through issuing a term sheet letter of intent under contract and then of course due diligence and closing. And right now, our pipeline is in excess of $300 million, and that split pretty much evenly between office and industrial. We, in fact, have 11 industrial properties, two-thirds of which are more distribution type and then about a third of that industrial is more manufacturing a combination office and assembly. And then the balance of the other nine are all strictly office. No medical office in the pipeline at this point other than maybe I think there's one small medical facility that we’re looking at in the Midwest but the others are predominately office. So, a pretty good split. And if you look at our - at really our current rent, we are split pretty much down the middle between office and industrial and we like that. I think we’ve more industrial space but the rents are pretty close.

Right, exactly. And then I guess lastly, David on the dividend you guys have done a good job obviously maintaining your dividend but we haven’t yet seen an increase form you guys in quite some time. What do you - we need to see from you guys in order to see that, that increase in the divined? Is it simply we – you need to have more acquisitions or is it kind of releasing some of the vacant space that you have? Is there any other thing that you are thinking about from a cost standpoint maybe that you can reduce on your end to maybe boost the divined?

Well, that’s a perennial question. We talk about that every quarter. The biggest problem of course is that we raise money and then have to put it to work, and every time you do that you damage your ability to raise the dividend unless you can put the money to work quickly. We think we have a couple of properties that are going to close reasonably quick with this money raise, which will help us a lot. But if there is a long time between the day you raise the money and then when you put the money to work in a building it just damages our ability to increase the dividend. So, we’ll see if these two get done in record time. We held out this IP - this offering until we felt like, we couldn’t wait anymore and that damaged a little bit in the marketplace by the price falling in the last couple of hours of the day. But right now, I think we’re in good shape to put this money to work and hopefully in the timeframe that we’re talking about, which is the July discussion by the board think about where we go from there. But I can’t make any promises we’re going to raise the dividend anytime soon only because every dividend is dependent on us increasing the assets and increasing them quickly when we have to raise capital.

Okay. So, it is definitely from the asset side, but you don’t think there is any type of expenses you guys could cut out at the current moment?

I don’t know of any. We look at it and we sweat over it day-in and day-out. So, I think, we’re in good shape there.

And then sorry last question, Bob, your Roseville, Minnesota property I think if you’re able to lease that up that would be very, very useful to your earnings. You said you had some interest there but any type of more detail you could provide there?

Well, we at this point have four very active prospects, two of them are office users and two of them are datacenter users. And they range in size from about 10,000 square feet to as much as 40,000 square feet. I can’t promise anything. All I can tell us is that our team, collective team, the brokers and our internal team are up there all the time pushing this. And the market has turned a bit now in Minneapolis so that we’re starting to see a bit more transaction velocity. So, we’re pressing and I agree with you the sooner we can get that released two-thirds of the properties are the better-off are going to be because of the – they get to on the OpEx side that we were absorbing. So, our projections are not assuming that we would kind of lease it up all up right away but we are assuming some lease up during this year.

Okay. Alright. Thank you very much.

Just to take you back on Dan’s question there we do have the one property in Kansas that’s going to hopefully come online and they start paying rent this summer. So that will help us as well. Next question, Denise?

(Operator Instructions). I show no further questions at this time, so I would like to turn the call back over to Mr. Gladstone for closing remarks.

Thank you, Denise. Thank you all for coming to our meeting and discussing some of the aspects. We wish we had more questions than just Dan’s but we’ve done a good job so I think as a result of that there aren’t a lot of questions could be asked. We’ll see you all next quarter. That’s the end of this conference call.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.